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Crude oil futures fell to near two-week lows on Monday (March 14) as investors hoped for progress in peace talks between Russia and Ukraine.
Oil prices were also pressured by China’s announcement to lockdown Shenzhen to contain the spread of COVID-19, which will impact oil demand.
- WTI crude futures were down $6.32, or 5.8%, at $103.01 a barrel.
- BRENT crude futures were down $5.77, or 5.1%, at $106.90 a barrel.
The oil market has been pressured by reports that the Chinese government has announced a lockdown of Shenzhen for at least a week to contain the spread of the coronavirus. The lockdown measures could cause traffic and manufacturing disruptions in Shenzhen. Shenzhen is the technology center of China with a population of about 17.5 million people. The city in the south of China is directly connected with Hong Kong.
At the same time, investors are also watching the talks on a nuclear agreement between Iran and the world powers. Although it has been repeatedly stated that the talks are close to a conclusion, no written agreement has yet been reached.
Negotiations on the Vienna nuclear deal between Iran and world powers have stalled after Russia filed a lawsuit saying the talks must be suspended indefinitely.
Russian Foreign Minister Sergei Lavrov insisted that there must be a guarantee that trade between Russia and Iran would not be affected by the West’s previous sanctions against Russia. This is a demand that the United States and Western nations are unwilling to accept.
However, one official expressed hope that all sides would return to the negotiating table before March 21, the Iranian New Year.
Iranian Foreign Ministry spokesman Saeed Khatibzadeh said talks on the Vienna nuclear agreement have been temporarily suspended to pave the way for a solution to the pending issue.
“We are currently having a breather from the nuclear talks. We are not at a point of announcing an agreement now since there are some important open issues that need to be decided upon by Washington,”said Khatibzadeh
Josep Borrell, the European Union’s foreign policy chief, tweeted on the issue, “A pause in #ViennaTalks is needed, due to external factors. A final text is essentially ready and on the table. As coordinator, I will, with my team, continue to be in touch with all #JCPOA participants and the U.S. to overcome the current situation and to close the agreement.”
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Tuesday, March 15, 2022